What Causes My HOA Dues to Increase, and How Can I Prevent It?

As HOA consultants in Chandler, AZ, we get asked this question a lot. It’s natural to wonder where your money’s going, and to want to hang on to every cent you can. But in the case of HOA dues, your money’s actually being put to good use. Those dues benefit you in the form of a well-kept community and increased property values.

In this post, we’ll explain how HOA dues are decided upon, how they’re spent and, more generally, how a financially stable community is run.

How are HOA dues set?

HOA dues are set annually via the budget that is adopted and approved by the board of directors and is based on the operational needs of the community. A portion of the annual budget includes a reserve transfer; which is a portion of the operational income that is transferred to the association’s reserve account for future capital replacements and repairs. To determine an appropriate amount to be transferred to the reserve account, your HOA board of directors may elect to order a reserve study—an assessment report from an outside expert that examines your community’s current financial standing, health of physical assets (such as pools or community roads), factoring in possible future maintenance, and then figures out what those community costs are likely to be over the long term. HOA dues are based on each owner’s portion of operational maintenance and reserve costs.

How are HOA dues spent?

Every year, there are thousands of everyday things that must be done to keep your community beautiful and functioning smoothly. Your community likely isn’t undertaking enormous maintenance projects every single year, but they must save for those projects over time—otherwise, HOA dues would need to increase dramatically overnight every time a big project came around.

Good HOA management in Chandler, AZ is crucial, as there is so much competition here for HOA-run communities. If your community lets its maintenance lapse, it will begin losing occupants to other communities, and in the long run this perpetuates a cycle that could end up decreasing your property values. It’s in everyone’s best financial interest that your community does everything it can to stay in tip-top shape. Some practical things your HOA dues are spent on include community roads, utilities, pool maintenance, landscaping, common area insurance, facility cleaning and maintenance and security.

How does my community ensure it is financially stable for the long term?

As HOA consultants in Chandler, AZ, we help communities remain financially stable. We use community reserve studies and meticulous accounting services to keep you aware of your community’s financial status from day to day. The two most important things a community can do to remain stable over time are, first, regularly